OPINION> You Nuo
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OPINION> You Nuo
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The truth of numbers
By You Nuo (China Daily)
Updated: 2009-04-20 07:45
On www.stats.gov.cn, the official website of the National Bureau of Statistics, one of the lead items is its director Ma Jiantang's recommendation of an article published on The Wall Street Journal's Chinese-language site. Tom Orlik, an independent contributor from Shanghai, says in the article that 2009 will be an important test of the quality of China's statistics. That a ministry-level official visits (and apparently visits quite regularly) a Wall Street Journal website is an encouraging sign. First, this newspaper does not have to feel jealous of it because people need competition in order to live together in a market. Second, China Daily's business reports are quoted and reported by the international press largely because of the improving quality of the government's economic data. This year, in a most troublesome time for economic commentators, China has made their lives a bit easier by beginning to release official quarterly GDP reports. However, just as how every corner of the Chinese market is flooded by the look-alikes of branded products, there are, every now and then, figures circulating in the media that look like data but are actually useless, if not downright nonsensical. Some figures are allegedly said by individuals holding quite respectable positions. Some are so absurdly erroneous that any responsible editor would not allow them to be printed. Recently, when writing about the housing market, this author was baffled by two widely quoted figures, which appear in high frequency in any media search on Chinese-language Internet sites. One is quoted from Ren Zhiqiang, chairman of the Huayuan Group, a leading housing development company in Beijing. Ren reportedly said all real estate businesses in China still have 360 million hectares of land waiting to be developed. If that is land waiting to be developed, it should not include the land that is already taken up by existing houses. But wait a minute. How much is 360 million hectares? If we are to believe the answer on metric-conversions.org, 360 million hectares is equal to 3.6 million square kilometers. That would take out more than 35 percent of China's territory and would be larger than the whole of India. It is mind-boggling how a business leader, a member of the Beijing municipal committee of the Chinese People's Political Consultative Conference (a government advisory body) and a man with a master's degree, could have made a statement like that. It is even more incredible how this figure was cited over and over again in the debate over housing prices on many Internet forums. Could anyone on these groups' editorial staff remember anything at all from his or her primary school math class? The second example involves Dai Jianzhong, a leading researcher in Beijing's municipal academy of social sciences. Dai reportedly claimed that an average housing unit (of 100 square meters in floor space), when calculated at an average housing price of 15,000 yuan per square meter, is 23 times the yearly income of an average household in urban Beijing, apparently too expensive for people to afford. Admittedly, Beijing is an expensive city. But why must the average housing unit be set at 100 square meters of floor space? No answers seem to be available. Plus, the average price quoted also begs some explanation - including how it was arrived at. Was it based on all housing units on offer or the number of units which were actually sold to the city's residents? Or was it just a medium figure on the list of all price quotations from the developers based in Beijing? For instance, were overseas buyers and institutional buyers duly considered in the calculation? And were the housing projects located outside Beijing but bought by the city's residents included as well? Worse still, based on such casual figures like those mentioned above, people tend to throw out stunning predictions of the market. One recent example of such a forecast stated that, across the board, China's housing price is set to tumble by 40 to 50 percent later this year. Hearing that, you might just want to ask: in which country were all the subprime loans issued? E-mail: younuo@chinadaily.com.cn |
